Minimum Wage Increase Reflects Changing Value of the Dollar

On June 2, the Seattle City Council voted to raise the city’s minimum wage to $15, which will be fully implemented for large businesses by 2017 and for small businesses by 2021. The multi-year phased process will begin in April 2015, when the minimum wage will rise from $9.32 to either $10 or $11, respectively, depending on the business size.

The Seattle Council’s decision reflects a larger national conversation around minimum wage increase proposals, where many have called for raising the federal minimum from $7.25 to $10.10. While Seattle’s increase is attracting a lot of attention because of its relative size, other states have also recently taken matters into their own hands to promote more livable wages. Michigan, for example, pledged to increase its minimum wage by 25 percent, to $9.25, by 2018, and Maryland has joined twenty-one other states that decided to increase their minimum wage to $10.10 in the absence of federal action.

As the minimum wage rises, individual eligibility for benefits and services will also change to reflect increases in take-home pay. Especially as minimum wage increases occur at the state and local level, it is less likely that the federal government will respond by adjusting qualification criteria for critical benefits. This is important for service providers to keep in mind, especially given the restructuring of the health care system, changes in SNAP funds, and the overall fluctuations of the economy, as individuals seeking or currently receiving services may have questions about their eligibility following wage increases.

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